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Stayingin TouchOctober 2004
Welcome to the latest edition of Staying In Touch- the magazine for deferred members of theUnilever Pension Fund.As a deferred pensioner, you are part of an incrediblydiverse group. You may have worked anywhere in theUK, or indeed the world, for any one of a multitude ofUnilever companies, for just a short time, or over manyyears. Alternatively, you might never have worked forUnilever at all! You might be working for anothercompany, or be self-employed or you might havestopped working altogether.Send your comments to:Staying in Touchc/o Unilever Pensions UKWalton CourtStation AvenueWalton-On-ThamesSurrey KT12 1UPor e-mail: pensions.uk@unilever.com (putting ‘Stayingin Touch’ in the subject line).Whatever your situation, the one thing you have incommon is an entitlement to a deferred pension fromthe Unilever Pension Fund. This magazine is designedspecifically with you in mind to answer some commonqueries, give you an insight into some current pensionissues and, of course, to help us stay in touch with you.We hope you enjoy this issue of Staying In Touch.New Contact DetailsIf you have a query about your pension benefits,please contact:The Unilever Pensions TeamHewitt Bacon & Woodrow6 More London PlaceLondon SE1 2DAFeedbackWe are committed to improving our communication, solet us know your views.or telephone: freephone 0800 028 0051(from within the UK)What do you think about Staying in Touch? 44 (0)20 7939 4909(from outside the UK)Was the information interesting?Did it tell you what you wanted to know?or e-mail: unileverpensionsteam@hewitt.comWhat else would you like to know about theUnilever Pension Fund (the UPF)?Don’t forget to quote your pension record number whichis on all correspondence from the UPF and also on theenvelope enclosing Staying in Touch.2
Introducing Hewitt Bacon & WoodrowOn 1 December 2003, Unilever outsourced theadministration for pensioner and deferred members ofthe Unilever Pension Fund (the UPF), including thepensioner payroll, to Hewitt Bacon & Woodrow (Hewitt).Under this arrangement, the Hewitt team, known as theUnilever Pensions Team, performs the administration ofyour benefits. Based in a new building near LondonBridge, and supported by other Hewitt staff in the firm’sHemel Hempstead and Epsom administration centres,the team is there to answer your questions, keep yourrecords up to date and put your pension into payment.All responsibility for the financial management of theUPF and for its strategic direction, however, remains withUnilever Pensions UK (UPUK).In the UK, the business was formed from the merger ofHewitt Associates and Bacon & Woodrow in 2002.Bacon & Woodrow have been helping clients managetheir employees’ retirement benefits since theirformation in 1924, growing to become one of the UK’sleading actuarial and benefits consulting firms. It hasbeen advising Unilever on actuarial and pension matterssince 1990.Following a strategic review, the partners of Bacon &Woodrow determined that a merger with Hewitt in theUK offered the optimum means of developing theirbusiness. The firm now employs 1,700 associates in theUK, approximately 600 of whom are dedicated toproviding outsourcing services. It provides pension andbenefit administration services to over 180 UK clientscovering more than 200 schemes with a combinedmembership of in excess of 550,000. Clients includeGlaxo SmithKline, The Royal Bank of Scotland and Dell.The Administration Team at HewittThere are 14 members in the team at Hewitt, nine ofwhom used to work in the Unilever pensions department.As you would expect, the whole team are fully trainedto deal with your questions. The Hewitt team hascontinued to work very closely with the UPUK team,developing strong working relationships to ensure thatthe high level of service, provided previously by UPUK,continues. The teams maintain regular contact and allaspects of service are measured and reviewed on amonthly basis by UPUK.ContactContact the Hewitt Bacon & Woodrow Unilever PensionsTeam with any queries about the administration of yourpension, and to inform them of change of address, bankdetails etc. Their details are:The Unilever Pensions TeamHewitt Bacon & Woodrow6 More London PlaceLondon SE1 2DAWho are Hewitt?Hewitt Bacon & Woodrow is the UK business of HewittAssociates, a global leader in the business of HumanResources and benefits outsourcing and consulting.Formed in the US in the 1940s, Hewitt entered theoutsourcing market there in the 1970s and has grown toemploy some 17,000 people, located in 88 offices in 38countries. Together they serve in excess of 2,600 clients.For the year ending 30 September 2003, Hewitt’s globalgross revenues exceeded 2 billion, over 60% of whichrelated to outsourced services. This makes Hewitt thelargest global provider of HR and benefits outsourcingservices, covering some 17 million individual customersand in excess of 54 million HR and benefits relatedtransactions each year. The firm was publicly listed onthe New York Stock Exchange in June 2002.or telephone: freephone 0800 028 0051(from within the UK) 44 (0)20 7939 4909(from outside the UK)or e-mail: unileverpensionsteam@hewitt.comDon’t forget to quote your pension record number whichis on all correspondence from the UPF and also on theenvelope enclosing Staying in Touch.3
Facts and figures from the Pension FundResults of the special interim actuarial valuationThe financial position of the FundIn last year’s Staying in Touch, we informed you of theresults of the triennial valuation. We noted that at thedate of the valuation, 31 March 2002, there was a smallpast service surplus in the UPF, meaning that on thatdate there was slightly more money in the Fund than wasnecessary to cover the cost of the benefits which hadbeen earned up to that date. This calculation was madeon the assumption that the UPF would continue inexistence for many years into the future. The SchemeActuary also remarked, however, that by the time hisreport was finalised, in November 2002, there had beensignificant falls in the prices of equities (where themajority of the UPF’s assets are invested) and rises inthe prices of bonds, since 31 March 2002. He thereforenoted, as we reported in the last edition, that a specialinterim actuarial valuation would take place, as at30 September 2003, to update the trustees and theCompany on the financial position of the Fund.The Report & Accounts for the Fund year ending March2004 are now available. These showed the size of theFund at 31 March 2004 to be 3,547m, whereas at31 March 2003 the Fund stood at 3,128m. Thisreflects a recovery in world stock markets, following anextended period of negative returns from such markets.Although in aggregate the fund managers did notmanage to beat the benchmark against which they aremeasured this year, over the longer five and ten yearperiods to 31 March 2004, they have done so, as youcan see from the graph below.23.521.62004 INVESTMENT PERFORMANCERATES OF RETURN (%)This review, which was presented to the trustees of theUPF in December 2003, revealed a deficit - the value ofthe assets at 30 September 2003 was less than the valueof the liabilities of the Fund. The amount of the deficit,on the basis of the UPF being a going concern, wasabout 400 million, and is largely attributable to the fallin stock markets. In order to remedy this shortfall overtime, the Company, on the recommendation of theScheme Actuary, agreed to pay an additional 62 millionper annum until the next formal valuation in March2005, at which time the contributions will be reviewed.These extra contributions started in January 2004.UNILEVER PENSION FUNDBENCHMARKRETAIL PRICES INDEX6.6This willingness on the part of Unilever to pay extracontributions to the UPF is a further demonstration of theCompany’s commitment to the Unilever Pension Fund.2.62.46.52.61.20.1ONE YEAR4FIVE YEARSTEN YEARS
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Formed in the US in the 1940s, Hewitt entered the outsourcing market there in the 1970s and has grown to employ some 17,000 people, located in 88 offices in 38 countries. Together they serve in excess of 2,600 clients. For the year ending 30 September 2003, Hewitt's global gross revenues exceeded 2 billion, over 60% of which
